Taxpayers may have to lose up to £200m after a council ‘gambled’ more than half a billion pounds on a green energy scheme run by a fast-moving financier, the Daily Mail can reveal.
Financially strapped Essex-based Thurrock Council has borrowed £655m in public money – triple what it spends on services each year – to invest in 53 solar parks across the UK.
It agreed a series of deals with global businessman Liam Kavanagh, whose integrity was later questioned by a High Court judge over £5million his company had paid in as a “commission”.
Thurrock hoped the huge investment would generate millions of dollars in additional revenue, but independent consultants hired by the city council have privately warned that the solar farms are worth far less than it takes to recoup their money.
They also raised concerns about using a $138m top-up investment made by Thurrock for the farms. And the latest interest payment of £12.5million owed to the council is months overdue, a Bureau of Investigative Journalism inquiry has found.
Taxpayers may have to lose up to £200m after a council ‘gambled’ more than half a billion pounds on a green energy scheme run by a fast-moving financier, the Daily Mail can reveal. Pictured is a solar park in Swindon
Although there are serious concerns about the impact of these deals on the Council’s finances, they certainly proved lucrative for Mr Kavanagh. During the years of Thurrock’s investment, Mr Kavanagh, 45, rightfully took millions in dividend payments and his jet-set lifestyle included the use of a private jet, a fleet of supercars and a Hampshire farmhouse with a swimming pool, wine cellar and home cinema and steam and jacuzzi room.
Because Thurrock borrowed all the money it invested from more than 100 other municipalities and a Treasury Department-backed loan program, if the loan defaults, taxpayers across the country will pay the price. Last night there were calls for an urgent government investigation into the “serious” situation.
Thurrock Councilor and Leader of the Opposition John Kent said: “This is a scandal of enormous proportions and we need to know what went so catastrophically wrong. I’m really not sure Thurrock Council can absorb a catastrophic loss of £200m – they could very well be on the brink of bankruptcy.’
He said council leaders had overseen a “massive game of taxpayers’ money”.
Thurrock’s involvement with Mr Kavanagh began in June 2016 when he worked with Warrington and Newham councilors to fund the purchase of a solar farm in Swindon through bonds marketed by his firm Rockfire Capital.
Over the next two years, Thurrock helped buy 53 sites across the UK, all now owned by Mr Kavanagh.
The investments were issued through a complex series of bonds, all maturing within the next five to six years.
In return, Thurrock would receive millions of dollars in interest payments.
Eventually, Thurrock became the sole municipal investor in Mr Kavanagh’s businesses. During the period under review Mr Kavanagh received in excess of £7.3m in dividend payments from Rockfire Capital. The company also paid a £5million commission for part of the deal, which was later criticized by a judge.
Mr Judge Henshaw ruled in April last year that Mr Kavanagh was “very likely” the source of “clear falsehoods” in a prospectus issued to Thurrock about some of the bonds.
Financially strapped Essex-based Thurrock Council has borrowed £655m in public money – triple what it spends on services each year – to invest in 53 solar parks across the UK. It agreed a series of deals with global businessman Liam Kavanagh (pictured).
It also ‘hidden’ the £5million fee, which the judge said raised ‘serious doubts’ as to whether it was a genuine fee for arranging the deal or a ‘covert taking of funds by Mr Kavanagh for his own benefit’ “ acted. Mr Kavanagh denied any wrongdoing.
Days after concerns about Thurrock’s 2020 solar deals arose, a new company, Anyard Holdings, was registered in the Isle of Man.
Mr Kavanagh then liquidated key companies that owed the council hundreds of millions and transitioned the solar farms to the new offshore structure.
The Mail understands Camdor Global Advisors, advisers hired by the council, determined the solar farms were not worth enough for Thurrock to recover all the money it had invested. The shortfall could be as high as £200m.
Dan Kirk, chief executive of Toucan Energy Services (TES), the company primarily responsible for the day-to-day management of Mr Kavanagh’s solar farms but separate from his businesses and investments, said in a statement Camdor asked him about The £138m top-up – which was said to go to some of the solar farms he manages for Mr Kavanagh – but Mr Kirk said TES never received any of the money.
Speed: Mr. Kavanagh owns super cars and also uses a private jet
A source close to Mr Kavanagh’s company said the investments had been properly recorded on the relevant balance sheets and claimed there were no specific conditions as to how the funds could be used. Mr Kavanagh declined to comment on the mail.
Thurrock’s council said: “The council and its external financial and legal experts have prepared a comprehensive resolution plan to protect the financial position of the council. Thurrock Council is confident that the actions taken on this matter will minimize risk and support the continued security of public funds.’
A spokesman for the Department of Leveling Up said: “We are closely monitoring the situation at Thurrock and will not hesitate to take action if necessary.”
